This General Iska Agreement is intended to structure applicable transactions as an Iska partnership in accordance with Jewish law, where a transaction might otherwise implicate Ribbis (usury).
By resolution adopted by the Board of Directors (the “Board”) of Gate Rock Capital, the undersigned, Gate Rock Capital on behalf of itself and its subsidiaries (“Investing Partner” or “Company”), of this General Iska Agreement (“General Iska Agreement”), hereby acknowledges and agrees on behalf of its Jewish shareholders, that any transaction or agreement in which the Investing Partner engages in (including but not limited to, transactions with individuals or companies that lend funds to the Company or its agents, or individuals or companies that borrow funds from the Company or its agents, in all forms of credit or deposits, including any obligations, guarantees, mortgages, savings, issuance of shares, any types of stock transactions, any activity or fees arising from any brokerage or escrow transactions) that would violate the Jewish laws of usury, (hereinafter, “Ribbis”), shall be deemed as an “Iska” partnership, subject to the following terms. Capitalized terms used but otherwise not defined herein shall have the meaning ascribed in accordance with Jewish law.
In exchange for any funds advanced, or funds that Halacha considers or will consider in the future, as if it were advanced to, or by, the undersigned parties in a manner that would violate Ribbis, such transaction shall be structured as an Iska, and the sums so delivered shall be used by the Managing Partner of such funds (the “Managing Partner”) for business investment purposes.
The Managing Partner shall invest the sums delivered to purchase or invest in such property or merchandise or other assets as the Managing Partner deems beneficial for the generating of profits. All profits and losses shall be shared equally between the Investing Partner and Managing Partner. In the event that it is necessary, according to Jewish law, that any Iska be structured as a “Kulo pikadon,” then all profits and losses of said Iska shall be deemed the sole property of the Investing Partner only.
The Managing Partner must verify any claim of loss through the testimony of two Halachically acceptable witnesses in an Orthodox Jewish court of law. Any claim regarding the amount of profits generated by the joint venture must be verified with a solemn oath, administered by an Orthodox Jewish court of law. In addition, the Investing Partner may demand full access to all legal records, documents, financial statements or receipts that the Investing Partner deems necessary to verify the claims of the Managing Partner.
In the case of a transaction in which the Managing Partner will not be investing the funds received from the Investing Partner into a profit-generating investment, the Managing Partner shall assign to the Investing Partner a share in its other investments equal to the value of the funds transferred as the Iska partnership.
In the event of a claim of loss or a lack of profit, (i) the Managing Partner shall provide written notice of such claimed loss or lack of profit (a “Notice”) to the Investing Partner within thirty days of the end of the month in which such claimed loss or lack of profit occurs; and (ii) the Investing Partner may demand a full and immediate payment of the remaining balance of this Iska.
The Managing Partner shall have complete authority to manage this investment and shall manage the Iska partnership in the manner deemed most beneficial to the Investing Partner. The Managing Partner shall be paid one dollar as a management fee for his or her services during the term of the Iska. The share of the Investing Partner shall be reduced by the sum of such management fee, whether or not there are any profits. Under no circumstances will the Investing Partner be responsible for any losses above the funds advanced.
It is agreed that if the Managing Partner pays the amount equal to the principal, fees, points, penalties, interest, plus any other payments called for by any agreement or other document signed by the two parties, as per the payment schedule of said agreement or document, as payment for the Investing Partner’s share of profits, the Investing Partner shall waive its right to demand verification of the results of the investment.
However, any future payments made to avoid providing such verification shall remain consistent with the applicable transaction document. Any additional profits shall belong solely to the Managing Partner.
In the event the Managing Partner does not provide a Notice as required hereunder, the Managing Partner may not claim a loss or lack of profit for such time period, and the presumption shall be that the investment made with the monies described herein continues to generate a profit.
In the event that (i) the Managing Partner does not make the monthly payments as required under the applicable transaction documents, or (ii) a covenant or other provision tied to a default interest rate is triggered, the presumption shall be that the investment is generating profits equal to the applicable rate set forth in the transaction documents.
Any payments made that are not justified by this General Iska Agreement shall reduce the principal balance of this Iska. Future payments shall be adjusted accordingly so that all payments remain consistent with the applicable transaction document.
The Company may obtain funding from parties not subject to the Laws of Ribbis via the sale or assignment of transaction documents. Upon such sale, and subject to the conditions set forth herein, this General Iska Agreement shall have no further effect.
This General Iska Agreement shall apply to any applicable transaction document regardless of whether it is referenced therein. In the event of any conflict, the terms of this General Iska Agreement shall prevail.
This General Iska Agreement is intended to be enforced solely in Beis Din and shall not be enforceable in any federal, state, or local court of the United States.
Any disputes shall be adjudicated by the Rabbinical Court Eitz Chaim of the Business Halacha Institute, or such other Beis Din as selected by Gate Rock Capital.
This General Iska Agreement was adopted by the Board of the Company and is binding upon the Company and its shareholders as a corporate bylaw.
Even if any party is unaware of this Heter Iska, the transaction shall nevertheless be deemed an Iska pursuant to this Agreement, as all dealings with the Company are conducted in accordance with its halachic rules.
From the effective date above, all transactions of the Company shall be governed exclusively by the terms of this General Iska Agreement. This Agreement has been effected with a proper Kinyan and is not an asmachta.